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Govt issues travel advisory against Iran and IsraelSARFAESI Act - Confirmed auction sale can be interfered by High Court by entertaining writ petition only when there is fraud/collusion and present case is not case of fraud or collusion : SC (See Tiolcorplaws.com)Delhi records 39.4 degree temperature today: IMDIndia-Peru FTA: 7th round of talks concludes in New DelhiGST - Circular 108/27/2019-GST cannot override the provisions of the substantive rules framed under the CGST Act: HC16th Finance Commission invites applications for Young Consultants on contract basisGST - Shocking state of affairs - Approach not conducive to international trade and commerce - Internal or departmental conflicts cannot cause prejudice to the assessee: HCECI scraps procedure of Form-M for migrants residing at Jammu and UdhampurGST - Merely because electronic portals did not make appropriate provisions, entitlement of petitioner to receive refund, being an entitlement under the IGST Act, cannot be defeated: HCGovt speeds up processing of Starlink application to provide internetST - s.73(4B) of FA, 1994 - True import and spirit of the provision required expediency on part of Assessing Officer and which has not been scrupulously complied with - Proceedings ought to have been completed within an year: HCHomoeopathy Symposium calls for global collaboration to enhance acceptanceEC seizes close to Rs 46 Cr cash in KarnatakaST - Avoiding multiple litigation - Public money blocked - Petitioner's request for early hearing of matter by Tribunal allowed: HCLargest investor in Nepal is India, says Nepalese diplomat in DelhiGST - Disallowance of ITC on the ground that ISD did not file GSTR Form-6 - No coercive action during pendency of petition: HCAmerican airlines urge Biden against nod for more flights to ChinaGST - Provisional release of goods and conveyance - Ad interim relief granted on payment of penalty and fine and execution of bond: HCRussian hackers penetrated into Microsoft access to step govt emails: US

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ITC reversal requirement on warehoused goods - a half-baked amendment?


common ITC reversal on warehoused goods

Lawmakers seem to have consciously excluded the values of goods supplied from warehouse in Explanation under Section 17(3) of CGST Act,2017 so as to restrict common ITC on input services say like GST paid on office rent from where the business is carried out. Let us take one common input service on rent to understand the issue in proper perspective.

For ease of understanding, let us take that a business man doing Rs 10 cr annual turnover has made a turnover of Rs 5 cr domestic supplies and Rs 5 cr warehouse supplies falling under clause 8(a) of Schedule-III to CGST Act,2017.

Assuming that he paid GST of Rs 6 lakhs on office rent in a year, would it not be prudent to reverse Rs 3 lakhs ( as per Rule 42) attributable clause 8(a) of Schedule-III supplies?. It is reasonable to restrict common ITC on office rent in my view. Of course, the lawmakers have waived reversal of ITC on common goods and services in respect of other Schedule-III supplies. Please note that schedule-III supplies are not liable to tax under GST law falling under non-GST supplies read with exempt supplies. Personal views expressed.

rrkothapally rrkothapally 27/05/2023

 

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